TSP Talk Weekly Wrap Up

Things started out pretty well for the stock market in August, but it didn’t take long to fall victim to the summer doldrums and give us its typical seasonally below average performance. There were some ups and down, but last week’s 1.8% to 3.2% losses in the TSP stock Funds cemented the final negative returns for the month.Here are the weekly and annual TSP fund returns through Friday, plus the final numbers for August.

Pre-holiday week trading can be tricky and misleading. The good news is, the S&P 500 filled the old open gap from back in July, which may act as support. The bad news is, the market leader – Dow Transportation Index – has already broken below those lows that the S&P is trying to hold onto.

The weekly chart of the S&P 500 is at some intermediate-term support (black line) but a long way from the support of the bottom of the long-term rising trading channel (red.) Within the blue box, something bearish happened on this chart last week… Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The weekly chart produced a negative outside bar (higher high and lower low compared to the prior week’s bar) and it closed below the prior week’s bar. This is called an outside reversal week and not normally a good formation.

It’s not always an instant gratification sell signal, but it is a deterioration of the chart and unless it was a pre-holiday fake-out, this could lead to more downside in the intermediate-term.

September brings with it uncertainty about Syria, the Fed bond buying plan, and an upcoming debt ceiling negotiation that could shut down the government if an agreement isn’t reached. The market likes to fool us often, and the smart money and those in the know will likely have the answers before we do, but I can’t see investors getting too excited to in front of this uncertainty.

Administrative Note: We have a new Service in the Premium Services area called TSP Talk Plus. You can read more about it here: www.tsptalk.com/plus.php. We are offering big savings to current subscribers to our other premium services, Intrepid Timer Strategies, and RevShark’s TSP Timing. More info.

The legal stuff:This information is for educational purposes only! This is not advice or are commendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.